Correlation Between Curve DAO and Radworks

Can any of the company-specific risk be diversified away by investing in both Curve DAO and Radworks at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Curve DAO and Radworks into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Curve DAO Token and Radworks, you can compare the effects of market volatilities on Curve DAO and Radworks and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Curve DAO with a short position of Radworks. Check out your portfolio center. Please also check ongoing floating volatility patterns of Curve DAO and Radworks.

Diversification Opportunities for Curve DAO and Radworks

0.78

Correlation Coefficient

Curve DAO  Radworks

Poor diversification

The 3 months correlation between Curve and Radworks is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Curve DAO Token and Radworks in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Radworks and Curve DAO is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Curve DAO Token are associated (or correlated) with Radworks. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Radworks has no effect on the direction of Curve DAO i.e., Curve DAO and Radworks go up and down completely randomly.

Pair Corralation between Curve DAO and Radworks

Assuming the 90 days trading horizon Curve DAO Token is expected to under-perform the Radworks. But the crypto coin apears to be less risky and, when comparing its historical volatility, Curve DAO Token is 1.31 times less risky than Radworks. The crypto coin trades about -0.01 of its potential returns per unit of risk. The Radworks is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  205.00  in Radworks on January 19, 2024 and sell it today you would lose (35.00) from holding Radworks or give up 17.07% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Curve DAO Token  vs.  Radworks

Curve DAO Token

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Curve DAO Token has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Crypto's basic indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for Curve DAO Token shareholders.

Radworks

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Radworks has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Crypto's fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for Radworks shareholders.

Pair Trading with Curve DAO and Radworks

The main advantage of trading using opposite Curve DAO and Radworks positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Curve DAO position performs unexpectedly, Radworks can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Radworks will offset losses from the drop in Radworks' long position.

The idea behind Curve DAO Token and Radworks pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the FinTech Suite module to use AI to screen and filter profitable investment opportunities.